Prepare all the eliminations and adjustments that would be

Sophisticated equity method, second year, eliminations, income statement. The trial balances of Pepper and Sultan companies of Exercise 5 for December 31, 20X2, are presented as follows:

 

Pepper

Sultan

Current Assets

152,000

115,000

Depreciable Fixed Assets

400,000

200,000

Accumulated Depreciation

(130,000)

(40,000)

Investment in Sultan Company

260,000

 

Current Liabilities

(80,000)

 

Common Stock ($10 par)

(300,000)

(100,000)

Retained Earnings, January 1, 20X2

(255,000)

(170,000)

Sales

(200,000)

(100,000)

Expenses

160,000

85,000

Subsidiary Income (from Sultan Company)

(7,000)

 

Dividends Declared

 

10,000

Totals

0

0

Pepper Company continues to use the sophisticated equity method.

1. Prepare all the eliminations and adjustments that would be made on the 20X2 consolidated worksheet.

2. Prepare the 20X2 consolidated income statement and its related income distribution schedules.

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Financial Accounting: Prepare all the eliminations and adjustments that would be
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